5 Things You Don't Ever Want to Forget When Filing a Tax Return
Putting together a tax return these days is somewhat like assembling an aircraft carrier in your back yard. You know there are several thousand pieces that have to fit together and you are probably quite sure that doing so should require some fairly advanced training. Unfortunately, we all have to do it at least once every year or be willing and trusting enough to take the chance that paying someone else to do it for us is a viable alternative.
If you are like most taxpayers, you file your own tax return since you are already shelling out a decent size part of your income to the government. While forgetting some things on your tax return is unlikely to cause problems for you, there are a few things you don't ever want to miss or they will come back to haunt you at some point down the road.
Here are the top things to remember when you file your income tax return:
1. Signing Your Return - The IRS requires that every taxpayer sign his or her return. If you forget to sign your return, it is 100% certain you will hear back from the tax man. This may sound like a no brainer but I know this is one mistake that I've made in my haste to get my tax return completed on time and it is actually a lot more common than you might think. One of the biggest mistakes tax payers make will be to sign the return themselves and forget to have their spouse sign it as well when filing jointly. Think this does not apply to you if you e-file? Not so fast. Even if you file your taxes online, you must still complete an electronic signature process or your return will not get accepted.
2. File By The Due Date - Even if you don't have the money to pay everything you owe when you file your tax return for the year, you must still file by the April 15th deadline or face added penalties on top of the interest you will owe. One of the most common tax myths is that simply filing an extension will clear you of any late filing fees or penalties. An extension simply extends the time you are given to accurately complete your return, it does not extend the due date for any money that you owe to the IRS.
3. Claim All of Your Income - The Internal Revenue Service has a system in place to match up information provided by employers and other companies in the form of W-2s, 1099s, or any other income that carries an official record. One sure way to get your tax return flagged for further examination is failing to claim all of your income. It may take them a little while to catch it but their system is very effective and they will eventually come after you for taxes, penalties, and interest on any income you neglect to report when you file. Missing even a single form that involves income you received will trigger at the very least, a mailed audit on that particular item and possibly a more detailed review.
4. Direct Deposit Your Refund - If you are expecting a tax refund, be sure to complete the direct deposit information on your return to speed the process. Missing this item will cause you to have to wait for a paper check from the IRS which can take as much as ten times longer to receive! They want their money right away so being equally passionate about wanting yours back when they owe you a refund is just fine. Be sure to include both the bank account number and the routing number for the account where you want your refund deposited. Taking advantage of direct deposit does not cost anything so it is to your advantage to use it.
5. Incorrect Basic Information - Review all the basic information you have entered on your return such as your name, address, filing status, and social security number. Sometimes it is the smallest of mistakes that can cause you the biggest headaches! Double and triple check that the social security numbers you have entered for your return are correct.
Did you know that the IRS uses this to determine your eligibility for several credits and deductions? If your social security number is off by even a single digit, you will cause yourself all kinds of trouble getting it sorted out in the future. Next, verify that you have entered the correct filing status. If you were married as of December 31st in the tax year you are filing a return, you must file as a married; even if you have since divorced. You may still choose whether you want to file jointly or separately as long as your report the correct marital status.
Finally, check your mailing address. This is the official address record the IRS will use for correspondence so you want to make sure that it is correct. If the IRS ever needs to contact you, it is best that you receive and respond to any requests on time.
This may seem like a very basic checklist but each of the items listed above can become costly and time-consuming mistakes if you miss them. This especially holds true for taxpayers who complete tax forms by hand as it is very easy to skip a field or print something by mistake that you somehow misinterpreted.
One way to get a little help is by using a tax software program such as TurboTax or H&R Block At Home to complete your return. These programs will help prompt you to remember key items and to verify critical information so you are much less likely to make a mistake.
There are definitely some major advantages to electronic income tax filing and preparation so it might be something you want to consider. Even if you plan to submit your tax return by mail, you can still take advantage of the error checks and reminder features that tax preparation programs offer. No matter how much time you put into your tax return, there is probably always something you could have done better or differently but paying careful attention to the items above should keep you from running into the most common mistakes.